Former mayor of Rathbun Joe Todey says he is taking responsibility for the financial mess the city is now. Part of it, he says, was not by overseeing former city clerk Brenda Anderson’s bookkeeping. He says he trusted Anderson’s verbal reports on city business when he should have asked to see actual documents.

“But it’s been that way for years and things got done,” he said of the small town’s way of doing business.

But according to a special audit by the Office of the Iowa Auditor of State, things weren’t getting done. The special audit found that $10,623.29 of Road Use Tax (RUT) funds were not received by the city because Anderson did not submit state mandated financial reports for fiscal years 2006 and 2007. Iowa Auditor of State David Vaudt reported that Rathbun spent $6,975.99 of RUT funds received from previous years for unallowable purposes, such as salaries, fire protection and supplies - which may have to be paid back to the state.

New Rathbun Mayor David Coffin said the special audit is being passed on to the Iowa Department of Transportation and it will be up to them whether that money will have to be paid back.

Permit fees

The special audit also found that existing city financial records did not indicate Anderson had paid the city for her business’s cigarette and alcohol permits totaling $775, nor was an estimated undeposited $900 to $1,500 in donations for city fireworks accounted for.

Todey said he never knew the city had not been collecting property taxes and that the city’s operating expenses were coming illegally from Road Use Tax funds. To collect property taxes, city councils must set a levy and approve and submit a yearly budget to the state - something the Rathbun City Council has not done for at least 10 years.

Anderson, who became the city clerk in March 2003, agrees with Todey that the city workings have been done that way for years - which included not holding regular meetings and not doing yearly budgets - long before she took the post.

Until the most recent city election, it was difficult to find anyone in Rathbun who even wanted to be on the City Council. Come election time, it was not uncommon to have most or all the council seats filled by write-in balloting.

Anderson said she walked into the job with no training and did the best she could. She admitted she was often late with making city deposits - which is why the special audit said it appeared she hadn’t been paying her business’s cigarette and alcohol permit fees to the city.

The special audit found that there were no deposits made to Rathbun’s checking account near the time period the permits were issued, nor were there any deposits during that time period for the amount of the permits. The undeposited liquor and cigarette permit fees for the former city clerk’s and husband Tom Anderson’s business, Tackle This, totaled $775. At that time, Tom Anderson was also a city council member.

The special audit stated that according to the former mayor, Anderson told the mayor that she had paid the fees when she brought him the permits to sign. The special audit continued that Anderson told the auditors that she paid the fees each year in cash and did not issue receipts to show payment of the fees.

“Based on the auditors review of the available records and the statements Anderson made to the new owners of Tackle This,” the report concluded, “it does not appear the city received payment for the cigarette permits issued to the former clerk for her business.”

Anderson told the Daily Iowegian that she would deposit the permit payments months later along with donations to the annual July 4 fireworks. And though she didn’t itemize when she deposited the funds at the bank, she did have the funds broken down in a check registry she passed on to the City Council when she officially resigned last summer.